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Comment by jacknews | Hacker News Reader

"The prices of Bitcoin and Ethereum, the two most popular coins, have tumbled more than 70 percent from pandemic highs; the NFT market has cratered; and optimism is in short supply. Everywhere you look, the dominoes are falling: One prominent firm, Three Arrows Capital, is reportedly approaching collapse, while other companies are desperately seeking bailouts to stay afloat."

As the article indirectly acknowledges, this sounds just like 2008.

I didn't see the banks all pack up their tables and go home then.

In fact they were collectively bailed out by government. That is, each and every one of us, indirectly.

edit: I certainly don't think crypto should be bailed.

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Interesting that many people expect that crypto which was hailed as independent of any government now needs to be bailed out by the government.

Why would banks even care about crypto except for transaction fees they can collect?

Literally no one is expecting Crypto to be bailed out by the US gov.

https://www.investmentweek.co.uk/news/4050676/bank-england-b...

It would be just a matter of time until other governments consider this too.

That's just for stablecoins backed by off-chain assets.

While these expectations are probably false, some people do think that it should be bailed out by the government. I mean, stupidity has no bounds.

For anyone that likes financial sector history, I would say its more like 1907.

Private sector bailouts managing any collapse. Important in cementing power.

I like that panic because JP Morgan had more money and valuable resources than the US government did at the time, and it is unfamiliar to imagine that government as not all powerful financially. But as a direct result of this, JP Morgan used his leveraged influence to push for that sovereign arm of finance in the United States and succeeded in a form of that with the Federal Reserve Act a few years later, combined with the income tax amendment it put the US on a path to being all powerful financially. Fascinating to me. I kind of like how the opportunities repeat.

Crypto firms aren’t systematically important, so no bailout is necessary or warranted. This is more like the .com bust than anything else. In both cases, irrational exuberance surrounding unsound companies quickly vanished.

Whose 401K was plundered to fund these bad investments?

No one’s 401k was plundered. Most of this was funded by the Federal Reserve via a combination of quantitative easing, low interest rates, and increasing the money supply. The Fed created the perfect environment for runaway speculation.

> In fact they were collectively bailed out by government.

If you think crypto will be bailed out by governments, keep dreaming.

I did not say that, and

I certainly don't think they should be.

Nor do I think the banks should have been bailed in 2008. Some indvidual banks were directly bailed, the entire industry was indirectly bailed.

Banking is kinda special industry that if it goes down entire economy goes down. On other hand many other sectors have same position, but they can be nationalized.

Closest thing is probably bailing out auto-industry, but I don't think there is appetite to do same with crypto as it really doesn't employ directly or indirectly enough people to matter.

Banks are quasi-governmental institutions, they will always be bailed out. They hold a special governmental license to create money. Too big to fail they call it.

Crypto ain't money, it's an asset class. Asset classes rise and fall, But none of these "billion dollar firms" created yesterday by a 25 year old are going to be safe when the price plummets given the highly leveraged nature of it all.

They're private corporations with the privilege to create money. They should not also enjoy the privilege of being absolved of problems caused by their excesses.

Crypto should certainly not get government bailouts.

Banks will likely stop being bailed out if we move to central bank digital currencies. If the money can still be moved around and things settled, banks are very much less needed.

some banks were bailed out. Many hundreds of banks went bust.

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